An error analysis of PPP (Precise Point Positioning) using IF (Ionosphere Free) combination is given in this paper. It is shown that the performance of the ordinary model with positions, clock bias, integer ambiguities and ionosphere delay as unknowns is equivalent to that of an ionosphere difference combination where ionosphere delay is cancelled out. Furthermore, it is shown that IF combination is an ionosphere difference combination but not unique. It is also proved that all difference models show same performances. The error analysis evaluated with a hardware simulator and real measurements show that the ionosphere delay is effectively eliminated by IF combination or equivalently by the ionosphere difference combination. However, if bias errors such as troposphere, clock bias or multipath are included in the measurements, the performance of the IF combination is degraded because the bias errors are amplified by the ionosphere difference operation.